Experts say cooperatives enable black communities to build wealth
Scholars and community activists called for more research on cooperatives in response to a Department of Agriculture hearing in September, beseeching officials to study urban and worker-owned co-ops among different racial groups. Such research could lead to better information on the number, type, and growth of black-owned and managed co-ops.
According to the National Black Business Trade Association, African Americans spend about 93% of their income outside of their communities. Many say this situation could be remedied by creating more black-owned and operated co-ops.
Just how could cooperatives accomplish this? “Co-ops are an economic model that includes ownership from more than one person,” says Angela Dawson, communications director for Northcountry Cooperative Development Fund in Minneapolis. “In the capitalistic model, there’s one boss. But in the cooperative model, there are many. Accountability and equity, as well as risk and reward, are spread out a lot more.
“The co-op model is so attractive because it’s sustainable by the community,” Dawson continues. “Everyone owns it, and it’s perpetual. It doesn’t depend on just one person and recycles back into the community.”
“Cooperatives can enable African Americans to have more control of their income, wealth creation, and work situation — particularly if it’s a worker-owned co-op,” says Jessica Gordon Nembhard, a member of the BLACK ENTERPRISE Board of Economists and professor of African American Studies at the University of Maryland, College Park. “Co-ops can also give workers more control over their finances and industrial labor.”
There are many different kinds of co-ops, including consumer-owned and worker-owned. Co-ops also exist in a variety of industries, including food, housing, healthcare, credit, farming, utilities, telecommunications, and transportation.
The most successful group of black co-ops is the Federation of Southern Cooperatives/ Land Assistance Fund, which is a “network of rural cooperatives, credit unions, and state associations of cooperatives and cooperative development centers in the southern United States,” says Nembhard. Since 1967, the federation has helped save black ownership of $87.5 million worth of land, mobilized $50 million in resources for support of member credit unions and co-ops (particularly in sustainable agriculture), and assisted more than 700 families with $26 million worth of affordable housing units.
“Specifically for minority communities and economically disadvantaged communities, co-ops are a very powerful idea because they allow us to have access,” says Antonio Rosell, an urban planner at Community Design Group in Minnesota. “Together, we can do many more things than we would be able to do by ourselves.”
How Cooperatives Work?
All cooperative businesses adhere to seven guiding principles:
- Voluntary and Open Membership – Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
- Democratic Member Control – Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner.
- Member’s Economic Participation — Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
- Autonomy and Independence – Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
- Education, Training, and Information – Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.
- Cooperation Among Cooperatives — Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
- Concern for Community — While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.